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Mid-Year Michigan Legislative Update

By Anton Dirnberger and Michael Chichester on

June 25, 2018

The Michigan Legislature has been busy during the first six months of 2018, addressing several issues that will impact employers across the state. Perhaps most significantly, the Michigan Legislature may send the issue of mandatory paid sick time to voters on their November ballot following the submission of over 380,000 signatures in support of the measure. Also, after a contentious ballot initiative process that made its way to the state Supreme Court, the Michigan Legislature repealed the state’s prevailing wage law, ensuring that future public works projects will no longer need to comply with prevailing wage requirements. Finally, the Michigan Legislature amended the state’s Wage and Fringe Benefit Act to clarify compliance for employers that pay employees on a monthly basis. Additional details on these developments can be found below.

Paid Leave Ballot Initiative

Michigan voters may have the opportunity to vote for mandatory paid sick time in November. On May 29, the group Michigan Time to Care submitted over 380,000 signatures for a petition in support of the Paid Sick Leave Act, which would afford employees at least one hour of paid sick time for every 30 hours worked. The petition will be reviewed by the Michigan Secretary of State and Board of Canvassers, and if at least 252,523 of those signatures are valid, the ballot proposal will be certified and then submitted to the Michigan Legislature. The Michigan Legislature can then either vote to enact the measure or send the issue to the voters for consideration on the November ballot.

Under the proposed Act, employers with 10 or more employees would be required to provide at least 72 hours of paid sick time per year. Employers with fewer than 10 employees would only have to provide 40 hours of paid sick time per year. As of June 2018, 10 states and Washington D.C. have laws requiring private employers to provide paid sick leave to their employees. Michigan employers should stay tuned in the event Michigan joins this group in the fall.

Michigan Legislature Repeals Prevailing Wage Law

Michigan’s prevailing wage law was repealed on June 6, 2018, by the Michigan Legislature’s adoption of a citizen petition. Michigan’s Prevailing Wages on State Projects law required paying the local wage and benefit rate—typically union scale—on state-financed construction and other public works projects. The group spearheading the signature collection process, called Protecting Michigan Taxpayers, first attempted to get the repeal initiative passed in 2016, but it was rejected due to alleged duplicate signatures. The group submitted a new petition with more than 380,000 signatures supporting the repeal initiative in November 2017. Opponents then challenged the petition effort before the Michigan Board of Canvassers. Following a 2-2 party-line vote, Protecting Michigan Taxpayers appealed the Board’s decision to the Michigan Court of Appeals. Upon consideration, the court of appeals ordered the Board of Canvassers to certify the petition. Opponents then appealed to the Michigan Supreme Court, which refused to consider the matter, allowing the court of appeals’ order to certify to stand.

From there, the Michigan Legislature had to enact the citizen petition or allow it to go to a public vote on the state’s upcoming November ballot. The Legislature promptly passed the citizen petition through both the State House and State Senate, and gave the repeal of the Prevailing Wage Law immediate effect. By meeting the signature threshold and passing the citizen petition through both houses of the Legislature, the Legislature was able to bypass review of the initiative and potential veto by the Governor. Although the repeal does not have retroactive effect on existing contracts, future state contracts will not be subject to Michigan’s former prevailing wage law. Employers that contract with the State of Michigan should be aware that future contracts for state-financed public works projects will no longer need to comply with prevailing wage requirements.

Technical Amendment to Michigan’s Wage and Fringe Benefit Act

The Michigan Legislature amended a portion the state’s Wage and Fringe Benefit Act to clarify compliance for employers that pay employees on a monthly basis. Previously, an employer that had established a monthly payday needed to pay all wages earned during the calendar month to employees on or before the first day of the subsequent calendar month. Following the amendment, an employer that maintains a monthly pay period is in compliance if the employer pays employees all wages earned during the monthly pay period within 15 days after the end of the monthly pay period.

Proponents of the amendment believe it may reduce the number of violations of the Act, which are subject to administrative fines and misdemeanor penalties. Employers that operate on a monthly payroll should take note that wages earned during the previous calendar month no longer need to be paid immediately on the first day of the next calendar month.

We will continue to monitor employment-related bills and ballot initiatives in Michigan, and report on any significant developments.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.